Citadel Capital Climbs on Speculation Abraaj Stake Sale Near

By Ahmed A Namatalla -
Jun 19, 2011

Citadel Capital SAE, an Egyptian
private equity firm with $4 billion in assets under management,
rose to the highest in almost three months on speculation it is
closer to selling a stake to Dubai-based Abraaj Capital Ltd.

The shares rose 4 percent to 6.32 Egyptian pounds at the
2:30 p.m. close in Cairo, the highest level since March 23. That
gave the company a market value of 4.18 billion pounds ($703
million). The benchmark EGX 30 Index (EGX30) gained 1.6 percent.

Private-equity firm Abraaj may hire Morgan Stanley as an
adviser on the planned acquisition, two people familiar with the
situation said June 16. Citadel Capital Partners, the main
shareholder in Citadel Capital, may hire Citigroup Inc. to
advise on the possible sale, the people said, speaking on
condition of anonymity because the talks are private. One person
said Abraaj is seeking a controlling stake in Citadel.

“Investors expect Abraaj to pay a higher price for Citadel
shares than they are currently trading at,” said Ramy El Agamy,
manager of institutional sales at NBK Capital Securities Egypt
in Cairo. “Citadel would benefit because Abraaj will provide
liquidity to enable it to continue its expansion in the region
after Egypt’s regulator refused its capital increase.”

Egypt’s markets regulator last month rejected Citadel’s
application for a capital increase because the company didn’t
provide enough detail on how it will use the funds. Citadel said
it would appeal the decision.

Morgan Stanley (MS) officials weren’t immediately available to
comment. Officials from Citigroup and Citadel Capital declined
to comment. None of the officials would be identified, citing
internal policy.